Foreclosure relief. President Bush and Treasury Secretary Henry Paulson have a plan. The plan will help a limited few. Estimates range from 145,000 to 250,000 people will benefit from the plan.

With more than 2 million loans adjusting less than 15% of those American will be helped. The freeze has a number of restrictions. The primary ones follow:

You need to realize the program is voluntary. In other words your lender is not obligated to do anything to freeze your rate. According to officials though, most lenders are expected to follow through.

Another major obstacle is the contractual obligations between loan servicer, the person you send your mortgage payments to, and investors. Most mortgages have been sliced up and resold through the securitization process. Understanding who ultimately has the authority to decide what modifications are possible is going to be difficult.

Only certain subprime borrowers are eligible. You must have taken your loan out between January 1st, 2005 and July 31st, 2007. Your first adjustment must be between January 1st, 2008 and July 31st, 2010. In addition your payment must increase more than 10%.

You must also be no more than 30 days delinquent and can not have 60 days late more than once in the past year. If you are deemed capable of paying your mortgage once the loan adjusts you will not be eligible. If you can't afford your loan at the initial rate you too will be ineligible.

If you pass the above criteria you must then prove you can afford your existing loan before it adjusts. That means you have to provide income documentation for the loan. The process is like going for a refinance but with some differences.

You will not have a loan officer helping you gather the necessary paperwork. You will be working with clerks who have no incentive to help you. If the freeze works out, great. If not, sorry Charlie. The clerk gets paid the same either way.

If you are approved your interest rate can be frozen for up to 5 years. There should be no closing costs.

The problem as I see it, is most people won't go for help until they fall behind. AT that point they probably won't qualify. Most consumers who are in sub prime loans have enough challenges managing their money and credit. Now they will have to run the gauntlet to try to have their rate frozen.

With only 250,000 people out of 2 million qualifying for the rate freeze. There is little hope that this plan will stop the real estate market from continuing it's downward spiral.

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